NEW DELHI: India's industrial output leapt to a 15-month high in October, the swing to positive territory offering a brief respite to policymakers battling a barrage of mostly grim economic news even though experts and the government played down the jump.

Data released by the government on Wednesday showed that industrial output as measured by the Index for Industrial Production (IIP) rose 8.2% year-on-year in October, almost double expectations and compared with a 0.73% contraction in September.

The October bounce, mainly on the back of a strong manufacturing sector growth, especially of consumer durables and capital goods, helped lift industrial output for the April-October period as a whole to positive territory at 1.2%.

Without it, the seven-month combined output growth number would have been negative or at best flat.

The September figure was revised downwards from a 0.4% contraction to a 0.73% fall while the July and August numbers too were revised to - 0.06% and 2.29% from -0.17% and 2.24%, respectively.

Expectedly, the government refrained from reading too much into the October figure, which experts called a statistical freak brought about by a low base and seasonal factors. "One swallow does not make a summer... There are signs of greenshoots. Let us be happy about the moment, but let's see how we go forward in next four months," Finance Minister P Chidambaram told reporters, an assessment shared by independent experts who wanted to watch the numbers for a few more months.

A separate official release showed that retail inflation had climbed to 9.9% in November from 9.75% in October, and the two data points read together all but doused hopes of any immediate cut in interest rates. Key stock market indices, rather than rally on the unexpected IIP performance, closed 0.16% down at 19,335 points.

Experts said the October expansion, which beat a Reuters forecast of 4.5% growth and came coincidentally on a day industrial output across the 17-nation European Union bloc unexpectedly slumped, was not likely to be sustained.

Rate Cut Hopes Fade Out

"We would not read too much into today's rebound as we expect the positive base effects of October to work in the opposite direction next month, causing IIP growth to contract in November," Nomura economist Sonal Varma said in a note.

Added BNP Paribas economist Mole Hau: "Combined with the latest round of survey evidence suggesting momentum still soft, headline production growth will drop back close to zero in the next release."

YES Bank chief economist Shubhada Rao said the October performance was unlikely to be replicated in the ensuing months and she expected IIP growth to remain subdued in the coming months and average close to 1.5% for the full year. Industrial production growth had contracted 5% in October last year, providing a strong base effect to this year's numbers, and the effect was also possibly magnified by the stocking up for the festival season that fell in November, later than usual.

Production of consumer goods rose 13.2% in October from a year ago, confirming the festival-related rise in output. Production of consumer durables was up 16.5% while that of non-durables rose 10.1%.

Even the 7.5% rise in the production of capital goods, which would suggest some pickup in investments, did not excite economists, who dismissed it as a statistical bounce.

The strong pickup in production of capital goods and consumer goods boosted manufacturing output growth to 9.6% in October from September's 1.5% contraction. Manufacturing has the highest 75% weight in the index of industrial production.

Â Electricity generation was up 5.5% in October while mining output contracted 0.1%.

The rebound started the new quarter on a strong note after GDP growth dropped to a 14-quarter low of 5.3% in July-September, but the granular data did not go far enough to change the entire picture.

However, it did temper expectations of a rate cut, especially after the rise in retail inflation, in the monetary policy review on December 18.

Arun Singh, senior economist at Dun & Bradstreet India, said he did not expect RBI to cut rates because inflationary pressures remain high, although he said there was a possibility of a rate cut by end of January.